Cyber Security Industry Growth Rate Will Reduce

The Cyber Security world is suffering from the economic conditions created by Coronavirus. In early 2020 it seemed that, with predictions estimating a growth of about 8-10% or higher, the industry would continue to thrive throughout the year and beyond. Now, with the significant impact of COVID-19 and the fears of a prolonged global recession, the cyber security industry is expected to only see minimal expansion this year.

Whilst figures differ between researchers, most analysts think that growth rates for cyber security firms will be reduced over 2020 to 2021. 

The Global Cyber Security Market Analysis report from ResearchAndMarkets says that the market is expected to grow from $149.46 billion in 2019 to $152.21 billion in 2020 at a compound annual growth rate (CAGR) of 1.83%. The slow growth is mainly due to the COVID-19 outbreak that has led to restrictive containment measures involving social distancing, remote working, and the closure of industries and other commercial activities that led to decline in the bottom line. 

As a result, companies' budgets for cyber security software is expected to decline. The market is then expected to recover and reach $208.28 billion in 2023 at CAGR of 11.02%.

Whilst the specialist Tech industry research firm Canalys has predicted that growth rate could still be as high as 5.6% (with a low estimate of 2.6%) this year, some groups are less optimistic. From instance, analysis from Gartner has projected that industry growth for cyber security will be as low as 2.4% in 2020.

Explanations for this follow a similar pattern, COVID-19 has negatively impacted businesses and in turn company IT budgets are expected to be drastically reduced for the foreseeable future. 

A seemingly inevitable recession is also feared to contribute to the stagnated growth figures currently predicted in the cyber security industry. Many cyber security firms will see this slowdown as expected, given the hit the majority of business sectors have taken during COVID-19. Companies are also aware that cyber security will remain a prominent industry, as digital attacks have continued to increase uninterrupted during 2020. Today, regulation mandates tighter controls on data and privacy, approaches to risk have evolved in digital enterprises, and business models are transitioning to cloud-based or managed services. 

As a result, security has become an increasingly strategic issue and enterprises are less able to dispense with it when cost-cutting. 

Nevertheless, enterprises will struggle with cash flow and budget freezes in 2020 and project postponements are likely to be widespread, delaying investment in new cyber security projects.What some will fear, however, is that companies with tighter budgets will expect more cost-effective services. This could mean fiercer competition between cyber security companies, as firms across the globe will be attempting to provide more protection for less.

Yet, there still has to be some optimism that if cyber threats continue to become more elaborate in design, digital security will still become an essential service in the long-term. This means that, whilst the industry might not be going from strength to strength for a while, cyber security firms will hopefully have a better chance of recovery over th course of the next year or so.

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